A relationship-focused approach to credit management

Considering the general rule that 80 per cent of your income is derived from 20 per cent of your customers, it is not surprising that so many firms are afraid of chasing debtors too vigorously for fear of losing their customer. Yet keeping cash flowing, and thus your business’s engine well oiled, is vital in today’s economy. This is why maintaining relationships with customers is so important.

Payment as indicator of a healthy customer relationship

Proactive credit management focuses on actively building and maintaining relationships with customers, to ensure that your invoices are kept in the forefront of their mind and settled as a priority over other suppliers. All supplier-customer relationships carry the risk of non-payment of invoices, but a proactive approach to credit management using behavioural insights allows you to pinpoint those customers representing the highest credit risk and act in a timely and sensitive manner, therefore avoiding potential disaster further down the road.

Value of relation

Companies that truly believe in customer relationships include customer intimacy in their credit, collections and complaints policy. No longer do they talk of ‘debt collection’; no longer is there a standard collections policy for all customers; and no longer does their policy almost inevitably lead to a debt collection agency or a write-off. The goal of a truly customer intimate credit, collections and complaint management policy is not simply to clear the payment path for outstanding invoices. A customer intimate credit manager is active on the interface between supplier and customer and can form the strongest of bonds to ensure that the relationship is sustained.

Integrated credit management

Strop: ‘I consider credit management as an extension of the business; it is a joint responsibility to get payments in within the agreed timeframe. Creating awareness is essential and credit management should have continuous attention. The speed of payment is an indication of the relationship with the customer and the quality of service in my opinion. If the relationship and service are good, customers are satisfied and happy to pay for it more quickly.’

Pro-active credit management is the right approach now and in the future.

Relationship with the customer

A good relationship with the customer comes first for Atos. Strop: ‘We provide services to our customers from different divisions, but for them Atos is one single supplier. My message to all departments: we are jointly responsible for good credit management and thus a healthy cash position. It is part of our corporate image. Focusing on the complete O2C process can prevent ‘issues’ at the end. Transparency and sharing the right information is essential: If a customer tells his contract manager that something is not going well, it is important that credit management hears about it. This can prevent unnecessary or wrong actions and save time and money.’

The integration of complaints in credit management has proved to be very successful. Strop: ‘If a payment is (too) late, we never ask ‘Why haven’t you paid yet?’, but we inquire whether there is a reason not to pay. We consciously choose this positive approach because it allows for a dialogue. We are also paying a lot of attention to ongoing disputes, which has changed the number of disputes from a relatively high number to a structurally low number. A good follow-up of complaints is directly visible in the number of overdue invoices. This shows that our focus and commitment to ensure that a customer has no reason not to pay is bearing fruit.’